Trump administration moves ahead with new round of tariffs on Chinese imports

Larry Hoffman
August 8, 2018

Washington is set to begin collecting 25 percent tariffs on another $16 billion in Chinese goods on August 23.

Talks between China and the US have failed to produce an agreement on the issue, prompting China to retaliate with tariffs of its own and US President Donald Trump to escalate his threats.

China reported larger than expected exports in July, even as the US prepared a new list of products for tariffs.

"Looking ahead, we expect export growth to cool in the coming months, though this will primarily reflect softer global growth rather than United States tariffs, the direct impact of which will continue to be mostly offset by the renminbi's (yuan's) recent depreciation", Capital Economics' Senior China Economist Julian Evans-Pritchard wrote in a note.

On Tuesday, the administration said it had chose to go ahead with tariffs on 279 of the 284 items added in June; they're worth about $16 billion a year.

A US-China trade war will reduce global output by 0.7% by 2020, with China's economy taking a 1.3% hit and US GDP dropping 1%, Oxford Economics said in a research note on Tuesday, before the new list was released.

Among the products removed from the earlier list on $16 billion of imports were shipping containers, including those used by freight companies.

The latest commentary from state media on Wednesday took a softer line after resorting to personal attacks against Trump earlier in the week, saying China could get through the storm but refrained from directly mentioning the US President. In July, Washington imposed tariffs on $34 billion worth of Chinese goods. It represents the latest salvo in the ever-expanding trade war between the United States and China. There is a mandatory 60-day comment period for industries to ask for exemptions from the tariffs.

His administration confirmed that its trade assault would soon cover more than $50 billion of products from China.

May 19: After a meeting, the two countriesannounce the outline of a trade dealto avoid the tariffs.

June 15: Trump rolls out thefinal list of goods subject to new tariffs.

June 18: Trumpthreatens a 10% tariff on another $200 billion worth of Chinese goods.

Several large American companies have said they would adjust their supply chains to source outside of China if tariffs on Chinese goods impacted them, while China's Haier Group (1169.HK) said rising steel prices amid hefty US import tariffs was driving up costs for its business in America.

The latest $16 billion list from the United States will hit semiconductors from China, even though numerous basic chips in these products originate from the United States, Taiwan or South Korea.

The duties are part of a broader round of USA tariffs on $50bn worth of goods announced in March.

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